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Breach of Fiduciary Duty

06/22/2018

“It’s been 16 years since Victor Posner passed away, but the legal war over the remnants of the master corporate raider’s real estate empire lives on.”

The former-girlfriend-turned-business-associate of corporate raider Victor Posner, who was named the primary beneficiary of his $321 million estate in 2002, filed a lawsuit against a prominent law firm for breach of fiduciary duty, legal malpractice and civil conspiracy.

Wealth Advisor’s article, “$300M Miami Estate Fight Gets Ugly, 16 Years Later,” reports that, according to the complaint filed in Miami-Dade Circuit Court last month, Brenda Nestor alleges that she suffered damages as a result of “negligent and reckless” legal advice the Akerman law firm provided to her court-appointed successor of Posner’s estate.

In 2015, Judge Celeste Hardee Muir removed Nestor, after she allegedly disregarded court orders for her failure to provide a full accounting of her actions as the Posner estate’s personal representative. The judge replaced Nestor with lawyer Philip von Kahle.

Nestor accused von Kahle—who is not named as a defendant in her lawsuit—of making her a scapegoat for the Posner estate’s dire finances. Her lawsuit states that the attorney is exercising his newly-developed 20-20 hindsight of the Great Recession that occurred in the late 2000s to early 2010s and that von Kahle started to second guess thousands of transactions she made, while acting as personal representative. She said that von Kahle was trying to “Monday-morning quarterback” her actions during her 13-year appointment as personal representative—many of which were approved by the probate court.

Nestor claims that von Kahle hired the Akerman law firm, which provided him with improper advice, such as recommending he file a lawsuit in 2016 against Fidelity to claim a $23.1 million bond she posted back in 2002 that allowed her to operate Posner’s real estate business through his estate. This lawsuit claims that Nestor caused the Posner estate to lose $375 million in value to negative $50 million during her tenure as personal representative. Her successor also accused Nestor of pouring “tens of millions of dollars into worthless businesses that were insolvent and had no value to the estate.”

Philip von Kahle also alleges that Nestor used estate funds and improperly distributed money to herself and companies, in which she had a personal stake. In her lawsuit, Nestor accuses Akerman of breaching its fiduciary duty by failing to advise the court of conflicts of interests von Kahle had regarding the sale of assets by self-dealing, of which the law firm had knowledge.